How to balance Business with Family and Friends

Doing business with Family and friends always seems like a good idea, especially when you are just starting the business, until things go wrong. Have you ever wondered why businesses hardly sustain, and rich people's wealth are hardly sustained long after the rich people are dead and gone? Or you think Dangote is the first millionaire or billionaire in Nigeria? Ojukwu's father was one of the richest men in Nigeria back then if not the richest man. Moshood Kashimawo Abiola popular known as MKO was a very, very rich man back in the 80s and 90s. Dantata was a very rich man back then too. This is but a few of the many Nigerian millionaires back in the days. Where are they now? Some are dead, some still alive. But where is their wealth? Was it passed on? To who? Why don't we hear of them anymore?

Here are a few things to consider when doing business with family and friends:

1 Define things

Family and friends are good when it comes to business. In fact, they are major instruments when it comes to promoting your business. They are the first people you look to when you need referrals. And this is very good. However when it comes to going into any business, you must have a clearly written agreement on ownership, roles, positions, and benefits in the business.

No matter how closely related you are with the person, even if you are twins or more, you must have a clear agreement. This helps you avoid any issue that may come up later in future.

2. Avoid Familiarity in business

Profit or loss doesn't excuse sentiments and familiarity. there are times when you have to be a little lenient with your prices when selling to a friend a family relation. But never assume they are entitled to it and then do it all the time. Secondly, there is nothing that kill a startup business like 'I will pay you later.'

I understand it is hard to look an elderly person in the eye and tell them 'this is not possible sir. It's pay before service (or product)' especially when they are some uncle, parent, mentor, or someone you hold with high esteem. But it's the right thing to do.

However you don't have to be too blunt in a way that will hurt your relationship. So I'll suggest you find the kindest ways to say it. Often times, when I am confronted with situations as this, I tell them,

'sir/ma/bro/sis as much as I am the owner of this business, I'm not alone in this. I'm only like a frontliner. I have people I report to. And I have to give proper account of everything that happens in the business. Even I myself am restricted from using the product or service for myself because everything is accounted for. So, I'm sorry that it has to be that way.'


Here is another example that works well for me.

'Look, I can't charge you any less than I charge my customers. Reason is, if I do that, I won't give the same value as I give those who pay in full, because I will want to assume I know you. And you won't want to talk too if I give you below expectations, cos of how much you paid.'

To give you a good value, I want to charge you like a normal customer so that whatever happens along the line, you can shout at me and even blast me like you would a normal customer, cos you paid for it. That's how good business works. If we operate on the basis of familiarity, we won't get the best of professionality.

You can come up with yours in the best way you feel will work, but don't forget, there is no nobility or professionalilty in mixing business with family. Family runs on sentiment, business runs on profit or loss. And no amount of familiarity can substitute for it. Business is just business. No hard feelings.

3 Partner with Professionals, Not family.

In business, people come together because they each have something to offer, not because they are related in any form. When you in a position to choose between an accountant with 5years of experience and a close friend or family member, and you go for the latter because you don't want the family to come after you, or because you don't want that family member to feel bad, then you just dug the hole where your business would soon be buried in.

Most great businesses in Nigeria are no more because when the founder died or left the office, the people who took it up are not necessarily equipped for that role or experienced in it. Most people in Nigeria get the job they are in simply because of who they know and not because of what they can do.

So if you must partner with people, you must be sure that the partner is determined by the value he or she has to offer rather than the closeness between you both. This is important for people who are looking to build a business that will outlive them.

4. The fish theory

A popular statement says when you give a person a fish, you feed them for days, but when you teach them how to catch a fish, you feed them for a lifetime. One of the best gift you can give a family or a friend is the latter. Most of them come for fish and sometimes they feel because you are family or because you are friends, they are entitled to your help.

And no matter how much you try explaining to them that business is brutal and you don't mean to appear stingy, they don't see things the way you see them. All they care is they hear you making calls and calling big amount of money, or wearing some suit or driving some car.

The best way to help them realize that out of the 'big' money that goes into the account, your capital is there, tax is there and the profit is a minute /mainu:t/ percentage of them total amount is by introducing them to the business. It's simple. Tell them that instead of giving them the little 'change' they always get from you, you want to help them make as much money as you make too. Then ask them to go get some money to start theirs. Teach them how to and send then forth. Doing that will help reduce the pressure of dealing with family and friends who come to you for help because they see you owning business and assume you have the money to give them.

5. Never Let Go of Families

Now this part sounds like I am contradicting myself. But here it is, as much as you want to be careful in your dealing with family and friends in business, you must also understand that these two sets can make or mar your business.

If you treat them well and handle them with a high level of understanding, they could be a wonderful instrument in spreading the gospel of your business. They could bring lots of clients/customers to your business without collecting a dime from you.

On the contrary, if you don't apply the wisdom you should, it could end up in some unnecessary misunderstanding and bitterness that will cause them to speak bad of your business and make it difficult for you to win your immediate audience. Not that it doesn't mean your business can't thrive should such happen. It only means it will be a lot difficult at the beginning.

If you ever have any contribution to make, or a contrary opinion or a question, please do ask here in the comment box. I'll be glad to hear from you. You can also contact me directly through WhatsApp on +2347080225737 or via mail address manicleworld@gmail.com

Thanks for reading to this point. Hope you gained something from it.